Arrayit last week said that it has made "significant progress" in its efforts to develop and launch pre-symptomatic tests, expand its microarray services, and introduce new instruments.
Specifically, CEO Rene Shena cited a recent agreement with contract research organization Docro to help prepare its OvaDx ovarian cancer test for submission to the US Food and Drug Administration for clearance later this year (BAN 3/23/2010).
Arrayit President Mark Shena noted in the statement that the firm has also made "important progress" to expand its biomarker discovery and validation services.
Still, the Sunnyvale, Calif.-based array company said its growth has been "frustrated" by a lack of capital and inability to meet orders, and that it expects to close one or more rounds of financing during the second quarter of this year.
"The company is pursuing growth capital to meet these objectives from several sources," Arrayit said in a statement. The firm also improved its balance sheet by retiring approximately $3.5 million in debt through equity conversion over the past few months, "further positioning the company for new investment."
Arrayit's lack of access to capital took a toll on its financial performance last year. As the firm reported in a recent filing with the US Securities and Exchange Commission, its revenues for the year ended Dec. 31, 2009, declined 1.7 percent to $4 million from $4.1 million in the prior-year period.
"Revenues remained virtually constant as our lack of financing hampered us in our efforts to accept more orders," Arrayit said of its performance.
Net loss in 2009 swelled 368 percent to $8.9 million from $1.9 million in the prior-year period.
Arrayit incurred a large non-recurring loss on derivative liability following its combination with Integrated Media Holdings in March 2009, through which it became a publicly traded firm.
Despite going public last year, Arrayit has "been frustrated in its ability to raise capital." In the SEC filing it said that if it is unable to complete licensing agreements for its diagnostic technologies, or raise $3 million in capital, it will be unable to pursue its business strategies.
"In the long term, [Arrayit] will need significant amounts of net cash to fund its research and development, to provide working capital and to repay its debt," the company said. "Failure to raise new capital will severely impact the company’s ability to complete its business plan."
Arrayit added that should it not be able to raise such funds, it will need to reduce expenses by "laying off staff and curtailing development." As of Dec. 31, 2009, Arrayit had 10 full-time employees and four part-time consultants.
Arrayit has been spending more to realize its transition from a firm that sells arrays and equipment for research purposes into a molecular diagnostics company. In August 2009 it established its Arrayit Diagnostics subsidiary in Houston to launch tests as they become available. In addition to its ovarian cancer program, Arrayit also has diagnostics for Parkinson's and Alzheimer's diseases in development (BAN 8/18/2009).
Specifically, the firm has an ongoing collaboration with the Parkinson’s Institute in Sunnyvale, Calif., to identify blood-based biomarkers associated with the disease. Arrayit is also working with Stanford University to identify blood-based biomarkers associated with Alzheimer's disease.
To support these efforts, Arrayit spent $335,100 on R&D last year. The expenditures were "primarily focused on our new diagnostic testing area," Arrayit said. The firm only had "minor expenditures" in 2008 on R&D.
The company ended the year with $1.7 million in net cash.
While molecular diagnostics remains at the forefront of Arrayit's agenda, the company has also been busy rolling out new products for researchers. Most recently, Arrayit partnered with Paris-based BioSystems International to produce and sell PlasmaScan antibody microarrays.
Paul Haje, Arrayit's vice president of sales and marketing, told BioArray News this week that the company now offers PlasmaScan antibody arrays in 80-antibody or 380-antibody array formats.
Commensurate with that launch, Arrayit began selling a protein array buffer kit that the firm claims can be used with an protein array.
On the instrument side, Arrayit recently rolled out its TrayMix S4 Automated Hybridization Station. The new instrument uses chaotic advection to speed hybridization time while allowing for through-binding of target and probe, Haje said. The hyb station can be used in gene expression, genotyping comparative genomic hybridization, and other array-based applications, he added.
The company also upgraded its SpotBot arrayer to include an improved printhead, software, and visualization system. Arrayit said that it has 339 SpotBots installed worldwide.
Arrayit is also now offering custom printing of proteins and peptides, Haje said. The company is also now making its variation identification platform available to customers who wish to develop and launch genotyping-based diagnostics on Arrayit's chips, Haje added.